Federal Reserve: Evaluation of the Eccles-1951 Renovation Project Management and Construction Costs

We undertook this evaluation to assess the Board’s oversight of the Eccles-1951 building renovation project and the construction costs associated with it, which have more than doubled from $921 million in the Board’s February 2020 renovation budget to $2.018 billion in the Board’s 2024 renovation budget (its most recently revised budget). 

We found that the Board has not effectively managed and executed its “construction manager at risk” (CMAR) contract and repeatedly deviated from its cost-management provisions. While the Board selected the CMAR delivery method in an attempt to address lessons learned from an earlier renovation of its Martin building and the budget overruns and schedule delays from that project, we found that many of the issues detailed in this report are similar to those that we identified in our prior reports concerning the Martin renovation. In particular, we determined that the Board did not take numerous actions available to it that could have better controlled costs and mitigated some of the significant construction cost increases. We also found that the Board’s internal project governance was insufficient to manage a project of this magnitude and complexity. 

We have seven recommendations to address the concerns and issues we identified. The Board concurred with our recommendations.